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Gilead (GILD) Teams Up With Nurix for Cancer and Other Drugs

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Biotech major Gilead Sciences, Inc. (GILD - Free Report) collaborates with San Francisco-based Nurix Therapeutics, Inc. to discover, develop and commercialize a pipeline of innovative targeted protein degradation drugs for patients with cancer and other challenging diseases.

Per the deal, Nurix will receive an upfront payment of $45 million, and is also entitled to milestone payments of $2.3 billion and up to low-double-digit-tiered royalties on net sales. For those programs that Nurix opts in to co-develop and co-detail, the parties will split development costs as well as profits and losses equally in the United States. Nurix will be eligible to receive royalties on ex-U.S. sales and reduced milestone payments.

While Nurix will utilize its proprietary drug discovery platform to identify novel agents that utilize E3 ligases to induce degradation of specified drug targets, Gilead will have an option to license drug candidates directed to up to five targets resulting from this discovery. Nurix will retain the option to co-develop and co-detail for up to two programs in the United States. However, the collaboration excludes its lead degradation program, for which Nurix retains all rights.

Earlier, Gilead had also collaborated with Agneus (AGEN - Free Report) for the development and commercialization of up to five novel immuno-oncology therapies.

Given the persistent decline in HCV sales, the company is looking to HIV and newer avenues to boost its top line. Gilead has made quite a few collaborations, of late, to strengthen and diversify its pipeline.

However, Gilead will have to generate substantial revenues from its HIV franchise to offset the HCV sales decline. This will be a challenging task for the company with stiff competition from the likes of GlaxoSmithKline (GSK - Free Report) in the HIV market and pricing issues.

Meanwhile, the company is intending to foray into the non-alcoholic steatohepatitis (NASH) and inflammation markets with late-stage candidates, selonsertib and filgotinib, respectively. It has collaborated with big pharma companies like Novo Nordisk (NVO - Free Report) for the same.

Gilead’s stock has gained 9.1% in the year so far compared with the industry's growth of 5.2%.

The deal bodes well for Nurix as it gets a strong partner in Gilead along with infusion of cash.

Zacks Rank

Gilead currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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